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05Feb 2016

The Geek's Reading List: Feb 5

Posted By: Brian Piccioni

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The Geek's Reading List is a weekly publication written by Valitas advisor, Brian Piccioni. Brian has been part of the technology industry for a third of a century now. He has been a sell-side research analyst for the past 20 years, where he was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best tech analysts in the world, and won a number of awards for stock-picking and estimating. The Geek's Reading List looks at recent developments in the technology sector by discussing articles that Brian compiled over the week. In his own words, the discussions are usually provocative, new, and counter-consensus. The sorts of things not being written anywhere else.

I swore off Apple products once I realized I was in an abusive relationship with a vendor. Apparently Apple has pushed out a software update which “bricks” iPhone 6s repaired by “unauthorized” parties. This is probably a violation of the law in a lot of places but I guess Apple figures it is the law. Regardless, class action lawyers are probably excited about the looming settlement. Apple’s justification that it is due to “security reasons” is laughable – it is like GM destroying your car “for safety reasons” because you installed non-GM brakes. I don’t understand why people put up with this.

“Thousands of iPhone 6 users claim they have been left holding almost worthless phones because Apple’s latest operating system permanently disables the handset if it detects that a repair has been carried out by a non-Apple technician. Relatively few people outside the tech world are aware of the so-called “error 53” problem, but if it happens to you you’ll know about it. And according to one specialist journalist, it “will kill your iPhone”. The issue appears to affect handsets where the home button, which has touch ID fingerprint recognition built-in, has been repaired by a “non-official” company or individual. It has also reportedly affected customers whose phone has been damaged but who have been able to carry on using it without the need for a repair.”

2) SwiftKey’s sale and the unsustainable state of the mobile app market

In case you missed the news Microsoft, following the tradition of all tech companies with cash, elected to give $250 million of that cash to the shareholders of SwiftKey, rather than their own shareholders who would probably waste it on alcohol or food or something. This article laments that fact that applications are cheap, and somehow implying that prices need to go up. As such it represents a journalists understanding of technology and basic capitalism: the apps are cheap because they are for the most part trivial and optional. Few people would have installed this app if they had to pay for it and fewer still would have paid enough to make the company profitable. The entire raison d’etre of most app companies is not to make money from their apps but to pray that some fool at a larger company thinks buying them is a good idea. In other words, SwiftKey’s strategy actually worked out for them.

“This system we have of paying a few lousy shekels for complex mobile apps? Apps we use and rely on every day, in many cases, and for which we expect to receive eternal upgrades and support? Yeah — that’s gotta go. I know, I know: The very thought of paying more than three bucks for a piece of software these days is tough to swallow, no matter how much value we may get out of the thing. But as this week’s sale of SwiftKey to Microsoft underscores, that sort of penny-pinching mentality makes it tough for mobile app developers to survive on their own in the long term. And sooner or later, that’s going to turn into a serious problem for us as consumers.”

3) Harnessing artificial intelligence to build an army of virtual analysts

Cybersecurity is shifting away from protecting systems from hackers to detecting intrusions once the firewalls, etc., have been breached. Since there are always ways to get in (including basic cons) you need to detect when malevolent activity is taking place and stop it. AI (real AI, not killer robots) seems to be an approach with significant long term potential although it is mostly useable in the corporate environment.

“Enterprises of all types and sizes are continually probed and targeted by cyber attackers. It doesn’t matter whether they are after the company’s or their customers’ information, or are trying to find ways in so that they can commit fraud, what matters is that many are succeeding. So far, the security industry’s attempts to stop them have not been enough, but maybe this situation will finally change. PatternEx, a startup that gathered a team of AI researcher from MIT CSAIL as well as security and distributed systems experts, is poised to shake up things in the user and entity behavior analytics market.”

Normally you’d expect the CEO of a $22B publicly traded company not to treat a customer with contempt and behave like a petulant 10-year old. It turns out that publicly criticising Tesla for a botched product release is sufficient to gain the attention of the CEO which then takes the bizarre step of making things worse by cancelling the guy’s order. I’d never invest in a Musk related company, but if I did I’d wonder if this is how the guy treats customers how does he treat employees?

“Elon Musk is known for doing things differently – indeed, it’s been a major reason why both he and his companies have been so successful. But fingers crossed this method of thinking outside the square doesn’t succeed: Musk has allegedly banned a blogger from buying one of his cars for criticising the South African billionaire. It wasn’t a personal attack, or some anonymous keyboard warrior making ‘Yo Mama’ jokes at Musk’s expense. Venture capital investor Stewart Alsop merely wrote a post on Medium having a go at Musk over tardiness at a Tesla event. Admittedly, the post had the inflammatory title ‘Dear @ElonMusk: You should be ashamed of yourself’, but its content was all legitimate.”

We read a lot about things like “renewable energy” in China but the fact is most of the power is generated from coal. Not just coal, but very dirty coal. This is a major source of China air pollution and related health issues. As the article notes, EVs are not an answer to this problem but something which may exacerbate it. Internal combustion engines are clean relative to coal generation plants, and having those plants run overtime to charge EVs makes the situation worse. The same holds for EVs anywhere: they are only as clean as the power used to recharge them.

“The government has been promoting electric vehicles to cut the smog that frequently envelops Chinese cities, helping sales quadruple last year and making China the biggest market, the finance minister said at the conference. Less than 1 percent of passenger cars are now new energy, but the pace of growth raises their potential to worsen smog. A series of studies by Tsinghua University, whose alumni includes the incumbent president, showed electric vehicles charged in China produce two to five times as much particulate matter and chemicals that contribute to smog versus gas-engine cars. Hybrid vehicles fare little better. “International experience shows that cleaning up the air doesn’t need to rely on electric vehicles,” said Los Angeles-based An Feng, director of the Innovation Center for Energy and Transportation. “Clean up the power plants.””

The barriers to entry to the development of technology products have never been lower than it is today. Besides a vast array of open source development tools for software and hardware, there is a global distribution system which allows people to sell their wares or buy needed components to and from anywhere. This isn’t going to translate to a Kenyan Apple or Nigerian Microsoft, but it might. For every multi-billion dollar Silicon Valley tech company there are thousands of small ones employing people and making money. There is no reason some of those can’t be based in Africa.

“Africa is on the verge of something big. This seems to be a quiet, cautious consensus in some investment communities. The past year has been peppered with stories of tech startup hubs emerging across the continent, from Lagos to Kigali to Agadir. The model of American tech entrepreneurship looks to be slowly sparking a renaissance in the Silicon Sahara. As the gaze of America’s VCs begins to settle on African entrepreneurs, many open questions are left unanswered. Will Africa play host to the tech world’s next gold rush? Can these markets stay stable enough to grow the next billion-dollar Internet companies? Does Africa have what it takes to emulate Silicon Valley? The answer is a resounding “Yes.” Big things are ahead for African tech.”

When I started writing about LED lighting about 10 years ago I had no idea costs were going to drop as quickly as they have, nor would I have predicted a major vendor was going to get out of the CFL business this soon. LED lights are not just energy efficient, they last a very long time (unlike CFLs) and the quality of light is better as well.

“That means this switch to LEDs is primarily about focusing on a single energy-efficient technology. GE’s real hope is that, in doing so, it can expand the market for LED bulbs. GE’s lighting head, John Strainic, says that across the industry, CFL bulbs hit about a 30 percent marketshare in 2007 thanks to big pushes from Walmart and Oprah — “I remember it very well,” he says, “because … I couldn’t find enough CFLs to ship to customers” — but the technology’s growth stopped there. In part, he says, that’s because consumers don’t like CFL’s slow start-up time. “It’s kinda been the product that everybody loves to hate.” LEDs solve that issue, so they may be able to capture a bigger market.”

This is yet another example of why you want to avoid using cloud services to store data, except as a backup. Barracuda decided it would be nice to offer cloud storage, now they have changed their mind, throwing customers who were foolish enough to rely on the service into panic. I’d be surprised if their servers have the capacity to allow people to download their data in time, and even if they did people with capped broadband probably won’t be able to. If you use the cloud for data storage, make sure to have 100% of it on a local backup.

“We are announcing today that the Copy and CudaDrive services will be discontinued on May 1, 2016. Copy and CudaDrive have provided easy-to-use cloud file services and sharing functionality to millions of users the past 4+ years. However, as our business focus has shifted, we had to make the difficult decision to discontinue the Copy and CudaDrive services and allocate those resources elsewhere. For more information on this decision, please view the blog post from Rod Mathews, our GM of Storage. We know this comes as disappointing news to our users, but rest assured that we will do everything we can to take care of each of you in the manner for which Barracuda is known.”

9) Crypto flaw was so glaring it may be intentional eavesdropping backdoor

The interesting thing here is not the flaw, which may or may not have been intentional, it is the fact it went unnoticed for about a year. In other words, quality control was so lax that somebody (potentially a hacker) was able to cripple security on this software and the “glaring” flaw wasn’t even noticed until recently. Whether or not this was intentional it shows how easy it can be to insert a backdoor and potentially profit for months without discovery.

“A post published to the Hacker News forum suggested that the non-prime parameter was the result of a code update published in January 2015. The update credited someone named Zhigang Wang for reporting the underlying problem and sending a patch. Posts attributed to Wang suggested that he worked for Oracle at the time that the fix was introduced. So far, no one has stepped forward to explain how an error of this magnitude was made and why it wasn’t spotted by developers maintaining the Socat code base. An e-mail sent to a former address used by Wang wasn’t immediately returned. This post will be updated if a response comes later.”

10) Use Malwarebytes antivirus? Then you should see what Google has found

Treat this as a sort of public service announcement. The good news is, Google has people looking out for this sort of thing, the bad news is one of the most popular anti-malware tools has security flaws. Of course it is hard to determine how likely these are to be an actual issue for most users. Now if Google could only scan its ads for scams and malware …

“Be warned that if you use Malwarebytes Anti-Malware, a popular piece of software for combating malware, there are some major vulnerabilities in the program – and these won’t be fixed for some time yet. The security flaws were first discovered by researcher Tavis Ormandy, who is part of Google’s Project Zero team that searches out exploits. Ormandy informed Malwarebytes of the vulnerabilities back in November, but now more than three months has passed, the details have been made public (which is Project Zero’s policy).”

This item lists a number of reports relating to cybersecurity approaches and concerns. T might be of interest to some readers. Hey – it’s a slow week.

“Given the ever changing nature of the cyber security industry, and the threats posed by attackers, researchers are constantly producing in depth reports that look into the evolving threat landscape. Here CBR rounds up some of the key findings of 2016.”

Greenwashing is when a company makes announcements or does things which purport to help the environment but are really just PR. The idea here is to (somehow) recapture the energy associated with braking and (somehow) make that into hydrogen which is (somehow) compressed and stored and (somehow) fed to the wheels during taxiing. Now, call me a skeptic, but most airplanes have neither electric generators nor motors on their wheels, probably for good reason, it is very hard to produce hydrogen from water using a short burst of electric power, and it is complicated and wasteful to compress and store said hydrogen, and the water to hydrogen to compressed hydrogen to electric motor efficiency would be well below 5%. Other than those details this makes perfect sense.

“Low-cost airline easyJet is discussing plans to install hydrogen batteries as part of a proposed zero emission fuel system, which would power its aircraft during taxiing. The budget service revealed designs for a hybrid plane this week, and said that it would begin trialling the technology later this year. The system will involve embedding a hydrogen fuel cell on board the aeroplanes, with the energy captured from the brakes on landing able to power the jet on the ground. This technique is similar to the high-end kinetic energy recovery systems (KERS) used in Formula One cars, which store recovered energy to later use for acceleration.”

Bitcoin mining is the process of solving bitcoin hashes to make a new Bitcoin. This is a very computationally intensive process and the price of Bitcoin tends to trend to the cost of the electricity used to mine the Bitcoin. This means that this frivolous activity is either done surreptitiously (i.e. using other people’s electricity) or happens in places where power is cheap. The utility in this case is being prudent in that they correctly assume that few Bitcoin mining operations will be around long enough to pay back their investment in the infrastructure they are being asked to supply. They should probably just demand payment upfront.

“The bitcoin mining boom has prompted a backlash in Washington state, where a local power board has proposed a rate hike for high-density power users. The Chelan County Public Utility District (PUD), which serves the Wenatchee area, wants to raise the rate for “high density load” customers from 3.4 cents per kilowatt hour to just above 5 cents. Bitcoin mining operations and their landlords are protesting the rate hike, which targets users with a power density above 250 watts per square foot. That’s extreme density for a data center, but not uncommon in bitcoin mining, which requires power-hungry custom chips.”

There are many deficiencies associated with Bitcoin and some of those are associated with its potential for money laundering. Mostly for PR reasons some legitimate businesses have begun to accept Bitcoin as payment, which opens the door further since you can use a two-step process to convert Bitcoin to merchandize then sell that merchandize for cash. This initiative will not, in any way, have an impact on Bitcon related money laundering but like many other technology related laws it probably sounds like a good idea and that is all that matters.

“The only time Bitcoin is truly anonymous is when people use Tor to create the addresses and then transact from them, also over Tor. The moment someone’s identity is tied to a certain “anonymous address,” they become exposed. The European Union’s solution is not to ban Tor (at least not yet), but to force Bitcoin users to reveal their identity the moment they try to exchange Bitcoin for real currencies. Most, if not all, of the major digital currency exchanges in the EU are already heavily regulated and demand photo IDs and proof of address before they enable your account, so it’s not clear at whom this regulation is targeted.”

15) Startup announces development of flexiramics—ceramics with paper-like properties

Materials technologies seem to an interesting place to be in. This ceramic material looks like a non-woven textile and yet has all the characteristics of a ceramic. There is no mention of how much is costs to make or whether it has been tested for safety – after all, asbestos is a non-woven mineral as well. The selected application is a peculiar one as well, however it might have been selected as a high valued added niche.

“Traditionally, ceramics have been made by forming clay into shapes and then heating it—the result being a hard, brittle, glass-like material. In more recent years, scientists have broadened the definition to include a class of materials that are defined by the bonds that hold their molecules together. Most often they are highly crystalline, making them heat resistant , e.g. the Space Shuttle heat shields, or as material used in electronics for parts that call for very low conductivity. That has generally meant that ceramics can be strong, but they can also shatter if dropped or abused. They also tend to not react to other materials making them useful in a wide variety of products. Now, Eurekite claims to have developed a ceramic that retains the positive attributes of ceramics yet is flexible, which explains its name.”

Let that be a lesson to you all – just not the one that has been reported. No doubt the cable is a cheap knock off made without basic quality control. Such is the problem with a lot of products made in China. The real problem is not with the cable but with the devices he tested it on. These should not have been destroyed no matter how bad the cable was. USB in particular is supposed to be resilient to all kinds of abuse, short circuits, and so on and clearly that gear wasn’t. So what the bad cable did was show how bad the equipment was designed, not the other way around.

“Upon further analysis, Leung found that the cable had killed the Chromebook’s embedded controller, a chip that manages tasks such as keyboard initialisation, USB charging, and reading temperature sensors. Unfortunately this meant that the laptop could no longer boot up: because Chrome OS’s Verified Boot tech could no longer verify the embedded controller, it would only boot into recovery mode. (As far as Verified Boot is concerned, the controller might’ve been compromised in some way.) To find out what sort of devilry had fried his gear, Leung then analysed the cable with a breakout board and a multimeter. What he found was really quite shocking: “it appears that they completely miswired the cable. The GND pin on the Type-A plug is tied to the Vbus pins on the Type-C plug. The Vbus pin on the Type-A plug is tied to GND on the Type-C plug.””

The constant cajoling to upgrade to Windows 10 is causing a lot of anger in some circles and I can understand why. I’m a big fan of Windows 10 but people shouldn’t be forced to upgrade if they don’t want to. The business motives for Microsoft are pretty clear though: the fewer people on older operating systems and the more people on Windows 10, the lower the cost of support will be. Expect that Microsoft will announce “end of support” for pre-Windows 10 operating systems as soon as it has the numbers to do so. Since Windows 10 is a sort of “rolling” OS rather than a version, all Windows 10 users will end up with the same version and support costs will drop significantly. This is about Microsoft’s profit margins, not a the user experience.

“As announced last October, the free Windows 10 update has been promoted from an “optional” update to being a “recommended” one. This means that with the default Windows Update settings, the new operating system will be downloaded automatically, and its installer will be started. The operating system will not actually install itself unattended; Microsoft says that users will be able to reject the upgrade or reschedule it for a time that’s more convenient. The company has also described a variety of registry settings that suppress the upgrade. In common with most Windows Update deployments, the change from “optional” to “recommended” will be phased in, so Windows 7 and 8.1 users may not see the change immediately.”

18) Today’s Hero Made an AI That Annoys Telemarketers For As Long As Possible

This guy deserves credit for a remarkable achievement. If I could figure out a way to automatically forward telemarketers to his phone number I’d do it. Perhaps somebody can make a telemarketer phone number database and an app which checks incoming numbers with the spoofed numbers these weasels use to bother us. Then the app could forward incoming calls to this service and waste their time. Tis to dream.

“Hanging up on annoying telemarketers is the easiest way to deal with them, but that just sends their autodialers onto the next unfortunate victim. Roger Anderson decided that telemarketers deserved a crueler fate, so he programmed an artificially intelligent bot that keeps them on the line for as long as possible. … After the initial “hello?, hello?,” Anderson’s sophisticated algorithm makes telemarketers think there’s an actual person on the line with random affirmations like “yes, uh huh, right.” It can even detect when a telemarketer is getting suspicious, triggering a completely inane response that usually convinces them otherwise. It’s absolutely brilliant when it works flawlessly.”

It is true that data centers require a lot of cooling, but the answer is probably not to sink the data center in the deep ocean. A pipe carrying water from the ocean to a chiller might be a better idea. Better yet would be to use the waste heat to pre-heat water for use in surrounding buildings. I have to wonder what the cost of a service call to a deep water data center would be.

“In 2014, Villanova Univ. researchers reported that datacenters were major source of energy waste. In fact, more than 2% of the U.S.’s total electricity usage can be attributed to datacenters. And almost half of that power was solely used for cooling the datacenters’ electronics. To remedy the problem, Microsoft is looking to the world’s oceans. “Project Natick” is attempting to pinpoint the pros and cons of manufacturing datacenters meant to operate below the ocean waves.”

Time was Japan was a leader in all kinds of things. That is mostly in the past, except they do seem to have a strong push for robotics and automation, probably because of looming chronic labor shortages associated with very bad demographics. This article is interesting but the application probably isn’t going to be main stream. Vertical farms may be OK when there isn’t farmland but they are relatively speaking an environmental nightmare. This one might be slightly less of a nightmare but I doubt it would be cost effective outside of Japan.

“Taking vertical urban indoor farming efficiency to the next level, a new automated plant coming to Japan will be staffed entirely by robots and produce 30,000 heads of lettuce daily. The so-called Vegetable Factory is a project of Spread, a Japanese company already operating vertical farms. Located in Kyoto, its small army of bots will various seed, water, trim and harvest the lettuce. Spread’s new automation technology will not only produce more lettuce, it will also reduce labor costs by 50%, cut energy use by 30%, and recycle 98% of water needed to grow the crops.”